Calgary’s industrial real estate market robust: report

CALGARY — Calgary’s industrial market has remained healthy during the third quarter of this year with just over one million square feet of positive absorption, according to a new report by Colliers International.

The jump in absorption is up from the second quarter which had 671,241 square feet of positive absorption.

Colliers said the rate of absorption is expected to carry forward for the rest of the year as many businesses push to make decisions by year end. Vacancy has increased from 5.45 per cent in second quarter to 5.65 per cent in the third quarter.

It said the increase in vacancy is due largely in part to the completion of 1,055,627 square feet of new construction.

“It is important to note that vacancy was up only slightly despite the fact that there was almost 1.1 million square feet of new construction coming to market primarily from the Great Plains Industrial Park and Rocky View Business Park. Developers continue to show confidence in Calgary and see ample opportunity in our local market,” said Joe Binfet, managing director for Colliers International in Calgary.

“The logistics base is vibrant in our industrial market, driven by strong consumer spending which ultimately drives warehousing. We are seeing some amalgamation in the trucking industry as it is somewhat oversaturated in Canada. This is driving some companies to seek larger pockets of space as they consolidate their operations.”

Consistent with trends year to date, the small and mid-bay users continue to be very active, said the Colliers report.

“This is putting pressure on rates as these bays are in high demand. Large bay users have been demonstrating increasing activity since 2012, and that momentum is expected in (the fourth quarter) 2013 and through 2014 as consumer confidence remains high with the local and national economic outlook remaining positive,” it said.

Colliers said planned inventory continues to rise as developers see strength and opportunity in the Calgary market. Planned inventory added in the third quarter totalled 1,117,183 square feet.

“This is reflective of an improving economy and confidence in the energy sector as a whole ... It’s apparent that developers are continuing to plan and build new supply which shows confidence in our market and the future of the Alberta economy,” said Colliers.

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